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SPDR Gold Shares (NYSE:GLD) — As noted in the Feb. 20 Daily Market Outlook, “Gold, as represented by GLD, has broken down with gusto. This was accompanied by a breakaway gap, followed by a continuation gap through the support line at about $162. There is a chance that the downtrend can be slowed as prices approach the lows of May 2012 at $148 to $150. ”

But instead of holding at this major support line, huge selling drove GLD through the triple-bottom of a long-term rectangle. The enormous selling pressure opened a gap at $143 to $147, and the ETF fell from $151 to $131.31 in just two days.

An oversold reaction rally, which started on April 16, has partially closed the gap, and MACD has issued a short-term buy signal. But enormous technical damage has been done and the long-term trend is down. Only the bravest would try to trade GLD back to $150.

Shareholders should sell GLD at the market, and traders should consider shorting it here. Selling short is a speculative technique that is not suitable for most investors. Please check with your broker for any special requirements and the ability to borrow shares. Also, a stop-loss order should be entered to protect against potentially unlimited losses.